However, he will remain in high-security Nabha prison in Patiala as he is facing several other cases, including that of Beant Singh's assassination, in different parts of Punjab and Haryana.
Judicial Magistrate Harpreet Kaur granted bail to Tara, who was extradited from Bangkok and brought to the country on January 16 by a team of Punjab Police.
Tara was produced in the court on transit remand from Patiala's high security Nabha jail in connection with the Burail jail break case.
Tara, Jagtar Singh Hawara, Paramjit Singh Bheora with another murder convict, Devi Singh, had made a sensational escape from Burail jail in January 2004 by digging a 104-foot-long tunnel.
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Hawara and Bheora were arrested later.
Tara was arrested in a joint operation of central agencies and Thailand police last month.
Devi Singh is still absconding.